US STOCKS-Wall Street advanced after Bernanke statement

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Last Updated: Wed, Jul 17, 2013 17:19 hrs

* Bank of America up after earnings

* Housing starts below expectations

* Indexes up: Dow 0.2 pct, S&P 0.35 pct, Nasdaq 0.34 pct

By Chuck Mikolajczak

NEW YORK, July 17 (Reuters) - U.S. stock indexes advanced
modestly at the open on Wednesday, after U.S. Federal Reserve
Chairman Ben Bernanke reiterated the central bank's plan to
begin to scale back its bond-buying program later this year.

In prepared remarks ahead of his semiannual monetary policy
report before the House of Representatives Financial Services
Committee at 10:00 a.m. EDT (1400 GMT), Bernanke stayed near the
timeline he first laid out last month, saying the Fed's
bond-buying program would cease by mid-2014, although he
stressed the plan could be subject to change.

Financial markets have been highly sensitive to speculation
over when the Fed will start to wind down its bond-buying
program. Comments by Bernanke and minutes from a Fed meeting in
late May triggered a 6-percent drop in the S&P 500 in the
month that followed.

But statements from Bernanke and Fed officials in recent
weeks have placated investors and erased those declines, with
the S&P rallying to fresh record highs on Monday.

"It's probably a fair assessment of the situation and it's
probably what the average investor expected," said Jack Ablin,
chief investment officer at BMO Private Bank in Chicago.

"We had a few communication mishaps earlier in the summer
and my view is he just wanted to eliminate all doubt - clarity
is good."

Economic data showed housing starts dropped 9.9 percent to a
seasonally adjusted annual rate of 836,000 units, the lowest
level since August last year and below the 959,000 forecast.

American Express fell 3.4 percent to $75.61 as the biggest
drag on both the Dow and S&P 500 after the European Commission
said it would propose a limit of 0.2 percent and 0.3 percent on
the fees that banks charge to process debit card and credit card
transactions. Visa Inc dipped 0.3 percent to $187.87 and
MasterCard Inc shed 0.7 percent to $585.65.

Mattel Inc slumped 7.1 percent to $43.05 after the
world's largest toymaker reported a weaker-than-expected 23
percent drop in profit as Barbie sales fell for the fourth
straight quarter.

Analysts expect S&P 500 companies' second-quarter earnings
to have grown 3 percent from a year earlier, with revenue up 1.5
percent, according to data from Thomson Reuters.

Of the 36 companies in the S&P 500 that have reported
results through Tuesday morning, 63.9 percent beat analysts'
expectations, and 55.6 percent surpassed revenue estimates.